We have used intracerebral transplantation as a paradigm for studying the development and plasticity of brain tissue. We have attempted to determine the essential factors involved in the development and survival of these tissues. Results indicate that the expression of cell adhesion molecules (CA Ms) is an important constituent of normal development and survival of grafted tissue. In tissue cultures, the outgrowth of chromaffin cell fibers is associated with the up-regulation of L1 and N- CAM molecule expression on their neurites. The intact L1 antigen, as well as its degradation products, supports neurite outgrowth of mesencephalic dopaminergic neurons. After transplantation, surviving adrenal medulla fragments within the host rat brain demonstrate an enhancement of L1 expression which is accompanied by a reorganization of the closely associated extra cellular matrix. Other data suggest that, alter grafting, MC class 11 immunoreactivity is enhanced in host parenchyma on microglial cells, but not on GFAP positive astrocytes. Genetic disparity does not seem to be the only factor affecting the survival of allogenic neural grafts, with and without systemic sensitization, and, in fact, plays only a relatively limited role. Susceptibility to neural graft rejection may depend on the immunogenicity of the donor, Ir gene, host allele, and host susceptibility to auto immune disease. Other results show that brain injury induces changes in CAM expression within adjacent tissues as well as in those tissues located some distance from the injury, indicating a possible molecular basis for lesion-induced plasticity in neuronal circuits within the striatum. Additionally, we have demonstrated an increase of N-CAM.immunoreactive material in the cerebrospinal fluid in schizophrenic patients. The data are consistent with the possibility of defects in CNS synaptogenesis or morphogenesis in schizophrenia.